Chinese DNA Researcher Said to Plan $400 Million Hong Kong IPO

BGI Tech, a unit of the world’s biggest DNA-sequencing group, plans to seek about $400 million from an initial public offering in Hong Kong, said two people with knowledge of the matter.

Citigroup Inc. and Morgan Stanley are arranging the share sale, said the people, who asked not to be identified because the information is private. BGI Tech, controlled by Shenzhen-based BGI, aims to start the offering in the fourth quarter, they said.

The company conducts DNA sequencing and protein studies for clients using technology developed by BGI. The group is restructuring ahead of the listing and hasn’t made a final decision on which assets will be included in BGI Tech’s IPO, according to one of the people.

Proceeds will help BGI Tech expand in the market for contract gene sequencing, which can be used by drugmakers seeking disease cures and agricultural companies engineering new plant varieties and cloning livestock. Its parent, which has laboratories in Japan and the U.S., has done research to combat severe acute respiratory syndrome, or SARS, and a deadly German strain of E. coli bacteria, according to its website.

BGI acquired Complete Genomics Inc., a Mountain View, California-based provider of gene-sequencing services, for $108 million in March 2013, according to data compiled by Bloomberg. Citigroup advised BGI on its purchase of the Nasdaq-listed company, the data show.

A Shenzhen-based spokeswoman for BGI declined to comment on the IPO plan.

Pig Clones

The Chinese group, founded as a nonprofit research institute in Beijing in 1999, set up BGI Tech in 2012 to commercialize its findings, according to its website. BGI Tech has more than 1,500 employees and has provided services to more than 20,000 scientific partners, the website shows.

BGI owns the world’s largest center for cloning pigs, which uses a low-cost method called “hand-made cloning” for “mass production” of genetically identical swine, state broadcaster CCTV reported Jan. 23. It produces about 500 cloned pigs per year at the facility, according to the report.

BGI has contributed 10 percent of the data collected by the International HapMap Project, which researchers use to find genes linked to disease, its website shows.

To contact the reporters on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net; Zijing Wu in Hong Kong at zwu17@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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